.   ;-)    I had a distinct sense the MTR workflow was going to be much more involved (depending on MY own involvement in it).Just trying to first learn from others on their:a.

Reinvest in Higher-Yield Opportunities: The cash from the refinance can be redeployed into other investments.

I would be doing this to be able to rent it out in the future at a higher rental rate. 

STR offers higher income potential, flexibility, and tax deductions but is subject to seasonal demand.

Many traveling professionals look for rentals under $2,400/month, though sometimes they can go higher if they are part of a group.Let me know if you need any help—I'd be happy to share everything I've learned!

Technically speaking, to develop with a higher density, then its an obvious yes that rezoning will be required.  

.- cash out refi loans have higher rate than if cash out was not occurring.  

When there's tenants already occupying the property, there's often times different leases that were signed among the tenants.Additionally, renting by room usually sees higher tenant turnover which in turn causes more work for the PM.Other challenges to consider:- Disputes/conflicts among tenants (different personalities if a tenant doesn't know the others prior)- Occupancy limits- Splitting utilities (what if someone uses more water?)

As @Chris Seveney mentioned there is not really enough equity in house 3 to get a meaningful LOC. even if you were able to leverage enough to pay off House 2 the new rate you would be paying would be higher than the existing mortgage, so you would still be behind overall.Your ROI on those payoffs vs keeping money in index funds is not very good either.Lastly, remember that cash flow from rentals can seem good until it’s not.

Higher down payments, adjustable rates, but it would allow you to leverage instead of paying all cash.